While the industry clamours for EU levels of funding – €3bn (£2.6bn) versus £500m pledged in the UK – some suggest policy should change. Ford is said to be mulling options, while Jaguar Land Rover’s plans could involve a gigafactory near its West Midlands manufacturing heartland. The business secretary, Kwasi Kwarteng, said Nissan could be the trigger for a “virtuous cycle” of new investment, although so far there are public plans, as yet unfunded, for just one other UK gigafactory – a facility for startup Britishvolt at a site in Blyth. That compares with 91 GWh in the US, including the giant Tesla facility in Nevada, 32 GWh in France, and 164 GWh in Germany. “Given that there is massive investment in gigafactories in the EU, the UK is lagging behind.”īy 2025, the SMMT forecasts the UK will have only a fraction of the production of other countries: 12 gigawatt hours of lithium-ion battery capacity. The other pressing factor is Brexit: the trade agreement with the EU means that by the end of 2026 the battery will have to be made in the UK or EU for an electric car produced in the UK to avoid tariffs. “They’re very heavy to move around, so transport costs are significant and car assembly is likely to gravitate to where batteries are being made.” “We’re going to need a lot of batteries,” says Bailey. That tipping point should be reached three to six years before the government enforces a switch away from new petrol and diesel cars in 2030, meaning electric vehicles become a cheaper – as well as greener – option for consumers, who buy some 2 million cars a year in the UK alone.Ī Nissan Leaf, the company’s successful battery powered car, coming off the production line at Sunderland. “Once the cost gets down to about $100 a kWh, you’ll get parity with the cost of the internal combustion engine.” Batteries, the fundamental component of electric cars, are mainly produced in Asia, which adds cost and subtracts value for European manufacturers.ĭavid Bailey, professor of business economics at Birmingham Business School, says: “The industry is electrifying very quickly – we will see very rapid change over the next five to 10 years.” The cost of batteries is more than 80% lower than a decade ago, when they averaged $1,000 a kilowatt hour. Nissan’s deal could create 6,000 new jobs, but the Society of Motor Manufacturers and Traders (SMMT) says 90,000 jobs are at risk without more gigafactories.ĭriven by climate policy and Brexit, the industry is repurposing itself and jostling for position. The industry says that is welcome, but nowhere near enough. The £1bn investment announced last week, from the Japanese carmaker, its battery partner Envision and the taxpayer, heralds a first gigafactory, with almost five times the capacity and potentially much more. The only existing EV battery facility in the UK is already Nissan’s, supplying thousands of its bestselling Leafs. While Britain is regarded as advanced in battery science and research, that is not the case in manufacturing.
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